Japan's electronics sector warns of dire outlook

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  • 4

    paulinusa

    If things continue to deteriorate, it'll be interesting to see the fate of Japan's most famous companies. The usual outcome is another company absorbing the weaker rival. But with the current state of business(everyone is weak), this time I'm not so sure. The only other hope is the government coming to the rescue and that's also possible but unlikely.

  • 5

    herefornow

    Only PlayStation maker Sony offered a glimmer of hope for the hard-hit sector,

    Pretty discuraging when the only glimmer of hope is the fact that Sony reduced its LOSS. The hollowing out is gaining steam, fast.

  • 9

    Debucho

    Japan's economy has gotten to where it is based on three factors:

    1) domestic protectionism - which allows them to jack up prices on the promise of "quality." The internet is killing this farce

    2) no innovation but great copying - Korea and China have caught up

    3) taking other ideas from the US and making them "Japanese" ie: compact copy versions of US innovations. This is all they have left, making things smaller and saying it is the "Japanese version."

    This fake economy and snake oil sales to domestic consumers, tricking them into paying more for the promise of "reliable made in Japan" can only last so long with the high Yen and cheap imports + tax hike + energy rate hike

  • 5

    titaniumdioxide

    Innovate! It is the only way. (But again rivals are going to plagiarize).

  • 2

    Schopenhauer

    While household electrical appliances makers are weak, heavy electrical equipment makers such as Hitachi, Toshiba, Mitsubishi are doing OK. They withdrew from household electrical appliances earlier.

  • 6

    laguy19

    Innovate would be the obvious choice to move forward, but since all of them have waited so long to do anything and are not sinking in the red, they have but no choice to either shut/spinoff/sell parts of their company, layoff more workers and either merge with another Japanese company or be bought outright by foreigners. Sad days ahead for the Japanese electronics industry. All of the blame really, has to go to the stubborn old management in charge of these companies.

  • 2

    ka_chan

    Protectionism coming to roost.

  • 3

    KnowBetter

    I'm doing my part to help Japan Inc only because I still believe that "Made in Japan" is better and I can't stand copycats and shitty customer service. Samsung and LG, that last comment was aimed at you! Sony needs to get back to its roots and get going. Quality is heading downhill fast and having Japanese companies making their products in places like China is only going to kill Japanese companies faster. I just can't believe how short sighted they are not seeing that. Nikon started their decline into crap made in Thailand and then China. Being a hardcore Nikon camera and lens user I've had nothing but problems with Nikon items not made in Japan. It's not just food but everything I buy I first look to see where it's made, price only factors in from store to store on the same item and not on similar items but the cheapest prices.

  • 4

    ohayo206

    Japan Inc. needs to reorganize their entire business model/structure. Its not just about innovating products, but their approach to international markets that sorely needs work.

  • -5

    blackrock

    @KnowBetter: exactly.

    @titaniumdioxide

    Innovate! It is the only way. (But again rivals are going to plagiarize).

    Actually Japanese researchers always innovate. They are on-par with US. Korean & Chinese are copycats. Someone might say Samsung sold more phones & TV than Sony, it's not innovating but it's the result of using (child) slave labors to mass produce mediocre products at a low cost.

  • 0

    alliswellinjapan

    Very critical state. Not so much because of their significant loss amounts, but more because of the clear indication that none of them have much idea as to where they should be heading. These gigantic ships are clearly sinking, and at faster speed than people may want to think. The industry field they compete in does not allow them to sink slowly. The only way out is to make sure you secure your lifeboat which may not hold everyone, not all areas of business, but will at least enable the survivors, their areas of true competency which they can hopefully specify, to continue sailing. Panasonic et al need to identify and focus all their resources on their respective lifeboats, fast.

  • 1

    Elbuda Mexicano

    Sure, Japan is going through some tough times now, but it will have to reinvent itself! Get back up on its feet, and "think outside of the so called box" for a while, thinking "inside the Japanese box" for too long, is not good for Japan and not good for the world, the joke was Japan was like the Galapagos, right??

  • 0

    hkitagawa

    Very simple to solve this problem: Government needs to print out money out of nothing since Yen is overvalued. It is the same as petroleum. If you increase the petroleum output, it will decrease the value of the gasoline. Also, if dollar has an annual inflation of 2 or 4 percent, yen will earn value of 2 or 4 percent per year. That means yen will become even more stronger, perhaps 75 damaging all the Japanese companies.

  • -2

    hkitagawa

    Keep the currency balance in value between countries may save the Japanese companies.

  • 0

    issa1

    To KnowBetter I'm doing my part to help Japan Inc only because I still believe that "Made in Japan" is better and I can't stand >>copycats and shitty customer service. Samsung and LG, that last comment was aimed at you! Sony needs to get >>back to its roots and get going. Quality is heading downhill fast and having Japanese companies making their >>products in places like China is only going to kill Japanese companies faster. I just can't believe how short sighted >>they are not seeing that. Nikon started their decline into crap made in Thailand and then China. Being a hardcore >>Nikon camera and lens user I've had nothing but problems with Nikon items not made in Japan. It's not just food but >>everything I buy I first look to see where it's made, price only factors in from store to store on the same item and not >>on similar items but the cheapest prices.

    Hahaha; I agree 100% with you!

  • -6

    issa1

    Debucho,taking other ideas from the US and making them "Japanese" ie: compact copy versions of US innovations. This is all they have left, making things smaller and saying it is the "Japanese version."

    I smell spy Chinese / Korean in the air.

  • 1

    CoreyL

    Japan has to tackle the trade imbalance like the US, but unfortunately, Japan still relies too much on export.

  • 1

    tokyo-star

    KnowBetter - while I agree with your comments, the masses will only buy with their wallet. Discount stores like Walmart only usually carry crap from China and Korea, and you usually end up having to go to a high-end enthusiast store to buy Japanese electronics, which come at a super premium price. And then the difference in quality is not that great these days anyway - unlike the 80s. Basically technology caught up, and J-Inc didn't do enough to innovate a decade ago.

  • -1

    JeffLee

    Japan missed the IT revolution early on and is now paying the price. IT's birthplace is Silicon Valley, not Japan, and its power centers are California and the Pacific Northwest.

    The exception is cameras, but that's because the J makers were able to leverage the platforms of their old analog cameras.

  • 2

    blackrock

    @JeffLee: Japan Inc has their own IT segments too, but not flashy as MS or IBM or Intel. What they did behind the scenes you would not know. The problem lies on consumer electronics, where they have to play against cheap mediocre products made in you-know-where.

  • 0

    yyj72

    It's only natural that the era when Japanese firms produce nearly every electronic gadget on earth is coming to an end. Japanese firms will go through a period of consolidation and then the resulting larger firms will take on the Samsungs and HTCs of the world. Bear in mind too: none of these products are produced solely in one country or by one company any more. An iPhone says "Made in China" on it, but it's only assembled there. It was concept-designed in the US, sure, but the largest share of the profit from a single iPhone goes to the Japanese firms who make the sophisticated components like the touch screen, display module and flash memory (Toshiba) or the front-end module (Murata). These behind-the-scenes Japanese makers of intermediate parts are making a royal killing on the market.

  • 3

    combinibento

    As noted above, Korea and China or copycats, fine. So why is Japan stagnating? Yes, because the strong yen, global recession, blah blah blah. The problem is that as time moves on and hardware improves, the copycats will get closer and closer to the quality of the good stuff. This is why LG and Samsung are enjoying much success of late. But the real secret to success beyond that is innovation. And this does NOT exist in any Asian country, and my theory is that this is due to poor immigration policies, or the lack of anyone wanting to move there. US companies like Apple, Google, Qualcomm, Microsoft, Yahoo, Intel, etc., all have thousands of immigrants working there on H1-B visas. Chinese, Indian, British, Korean, Finnish, whatever. Innovation comes from this type of environment. i.e., not limiting your talent pool to one homogeneous society. Apple's main reason for success, aside from Steve Jobs, is Jonathan Ive, a non-American. Once these Japanese giants, and by extension the nation at large, start embracing a better attitude towards immigration, they will innovate again. Don't hold your breath though.

  • 2

    Disillusioned

    Ah, but Japan is such a rich country, isn't it? The Japanese economy is headed for doom, if it hasn't already achieved it. The number of large Japanese companies showing huge losses and downturns in production is growing daily and it is not only in Japan the companies are failing. Many of their international branches are failing too. The government is broke. Japan has the largest international debt in the world it can never pay back. Many of the major corporations are going broke. The unemployment rate is set to rise dramatically in a failing economy. Put these together and it can only mean one thing, an economic depression. In short, Japan is screwed!

  • 3

    Rhino

    It is true that Japan Inc is exploiting its own people and they get away with it because especially older generations can`t benefit from the internet yet. And this is changing now. But, what really needs to be done to stop the tendency of Japanese companies to go down the drain is to change their school system. Unfortunately, most of the teachers I am working with grew up during and shortly after the bubble era, and they are still under the mistaken impression that things will always be that good and Japan will always be one of the leading nations in this world and China will always be a cheap factory.

    Teachers of Japan, you get paid a lot of money. Live up to your responsibilities and prepare Japan`s kids for the real world. Get off your lazy a......

  • 0

    changamangaliay

    Despite having best technology Japanese companies are too slow to react and adopts to needs of global markets + their marketing departments also failed badly.

  • 1

    Zenpun

    Apple's main reason for success, aside from Steve Jobs, is Jonathan Ive, a non-American.

    They are good in marketing and promotion for maximizing sales. However they are not real innovators of software or hardware.

    Apple main reason for success is they did not built any factories. Apple does not need to lease or own factories or land space. Apple does not need to involve every process. They outsource most of the jobs for making products. Another meaning is they leased other brains and hands for operation. Apple contractor is Fox Comm of Taiwan. Fox comm also sub contract many of I phones work to to others. Apple Retina (pixel blinking free) for close distance is popular. That patent was owned by Sharp and LG. It was not an Apple innovation. Apple Iphone or Ipad has mixture of US software, Japanese Toshiba flash memory, Korean LG display panel, Chinese handset and Taiwanese chips.

    Apple has Apple TV. It is not real TV like Panasonic, Sharp, Toshiba, Hitachi and Sony. It is small, low power consumed WIFI device for transferring movies from small Iphone and Ipad to larger TV screen. The wisdom of Apple is absorbing individual goodness to make end user product. It has saved a lot of money for research and development too. Microsoft software are very good like Apple. Sadly Microsoft is a late comer for phone and tablet market.

  • -4

    LostinNagoya

    Given its industries, Japan should by now be releasing phones with holograms, to mention only one technology that will appear eventually. They could release phones with their own OS, a good one to match iOS and stop using crap OS from different western companies. IMO, the only industries that could come up with a really working phone OS to rival iOS are the Japanese ones.

  • 0

    MicahDLM

    Unfortunately "what goes up, must come down"! I've seen this scenario in Europe some time ago, they are always looking for a country that offers cheaper labour. What happens when they run out of countries and what happens if ose cheap labourers also want a piece of the pie?

  • 3

    JeffLee

    @blackrock

    I've been in Japan long enough as a consumer to know that most of the big IT innovations are late in coming to Japan...after they've been invented and developed elsewhere (usually the US)

    This includes, yes, cell phones, the internet, wifi, e-commerce, etc. More recently smartphones, and currently e-readers.

    Back in the 90s, my friends in the US, Canada and Singapore had personal email addresses about 2 years before ISPs and email became available for consumers in Japan.

  • -2

    cleo

    Back in the 90s, my friends in the US, Canada and Singapore had personal email addresses about 2 years before ISPs and email became available for consumers in Japan.

    That's strange, because I was submitting work files via email certainly by 1991 if not earlier.

  • 0

    tokyostyle

    as long as japanese keeps buying its shitty products just because of its japanese, i don't see the blue coming in the near term.

  • 3

    GW

    The decline 0f J-electronics companies has been a freight train in plain sight now for 15yrs easy, especially in the last 10....................

    This is all REAL SIMPLE, I remember growing up everything was made in US/CDA/Europe, then cam Japan making cheap copies, then Japan made things, smaller & better & then there were none or almost no more US/Cda/Europe makers.......................

    So it was Japans turn from the 80s to early 90s, THEN thats when Japan starting heading south, it was it its inbred inflexiblity, massive over staffing, fleecing of the J-market & China & other started coming on the scene.

    The writing has been on the wall since 1995, now Japan is set to experience what NAmerica & Europe experienced, BUT Japan is failing to face reality very much so I its hitting here hard & going to hit a LOT HARDER soon.

    Thats the way the ball bounces, time to start paying attention Japan!

  • -3

    JapanGal

    It all has to do with this ridiculous yen rate.

  • 2

    Jimizo

    @japangal While its true that this Exchange rate is damaging, Japanese manufacturers need to change their direction. I've worked at a Japanese manufacturing company for a long time and they still have elements of a dangerously complacent 'Japanese is best' mindset. Apple and Samsung left Panasonic trailing in their wake with smartphones ( some actually seemed proud that Japan's 'Galapagos' phenomenon reflected Japan's supposed uniqueness ). Japanese goods were regarded as cheap imitations in the past by Europeans and Americans and their increasing quality soon put pay that condescending myth. I can't help but think Japan is making the same mistake.

  • -4

    Elbuda Mexicano

    Japan still makes some good products, sure my NEC computer is more expensive than some off the wall pc maker from China or Taiwan, but if I want to ask something about my computer, I will actually get a JAPANESE person to help me with my pc but if I get another brand, non Japanese PC, when I call for help, I will get somebody in China who may speak pretty good Japanese but it is disheartening for Japanese to have to get help in Japanese from Chinese etc..when there are plenty of Japanese people who could also do this job, but those cheap companies want to pay cheaper wages so they answer your calls in China instead of Japan, anyway that has been my experience with cheaper products in Japan, so in my case as long as keep living here in Japan, I prefer to have my help in Japanese by a Japanese.

  • 1

    sighclops

    The problem is simple. There has been little innovation in the Japanese tech industry over the past 10 years. There's been a monumental shift in the industry - from a hardware focus to a software focus. Pair this with the "ecosystem lock-in" that is dominated by Apple & Google, and there's little room for anyone else. Japan Inc. didn't produce the iPhone because they're so far behind in software innovation.

    Sure, Japanese OEMs can pump out Android devices in great volumes, but the sad reality is, only Samsung is making any money. The Japanese OEMs are too focused on gimmicks, rather than real innovation.

    The market doesn't want waterproof / dustproof / solar-powered / TV-enabled / dual-screened / seasonal coloured / candy-themed devices. This is reflected in sales - the market now basically belongs to the iPhone 5 and the Galaxy S3.

    Best selling tablets? Asus' Nexus 7 (running STOCK Android, not OEM bloatware that's so Win 95) and Amazon's Kindle (running an entirely customised skin and, again, has "ecosystem lock-in").

    The only hope really is if Sony can score a place in the Nexus line up.

  • 0

    nishikat

    1) domestic protectionism - which allows them to jack up prices on the promise of "quality." The internet is killing this farce

    Does mean tariffs? They are zero percent for electronics and cars. In some ways Japan is a very open market. I might buy a tablet computer soon and the one I am looking at is cheaper here than in America when converting currency. I love shopping for imported electronics in Japan. I can't remember the last time I bought a WALK-anything from Sony or any other Japanese manufacturer. Yes, Japan has lots of problems in this sector. But protectionism? Perhaps at worst in the past but now? But at the present? Where? How?

  • 0

    nishikat

    Sony needs to get back to its roots and get going

    I read an interesting article about a smart nerdy engineer who, in the early 2000s, did design an idea for a Tablet but it didn't take off with management. Would have been interesting if they had. I mean it could have been a good match as Sony is also a media company. End of an era there? The same article said that this breed of engineer at Sony does not exist there anymore. Or if they did, the current management state of Sony would stifle their creativity.

  • 0

    MADCOWS

    Japan has been missing clear political direction on many aspect to direct japan forward, ecomomically ,socially , technologically. selfish political system just continue with infigting taking japan to the edge..........

  • 0

    danalawton1@yahoo.com

    The U.S. has dozens of Venture Capital companies all out looking to Buy companies with good potential but are poorly managed. Japan has hundreds of companies that fit this bill..... but well you know. Fortress Japan..... the walls will crumble from within.

  • 0

    titaniumdioxide

    @blackrock

    Yes you are right. Unfortunately Japanese companies are slowpokes in implementing those innovation. Some of those innovation takes more than half a decade just to bring everything into the market. What Japan should do is to become an aggressive player in different markets. Japan's investment to its "Talent Economy" is high and this is noticeable to the number of patents filed throughout the past decade. http://www.wipo.int/ipstats/en/statistics/patents/wipo_pub_931.html

    One of the biggest achievement of the Japanese this year alone are the "nuclear reprogramming" by Shinya Yamanaka who won the Nobel Medicine Prize . Also the discovery of the PERDIODIC ELEMENT no. 113 http://www.youtube.com/watch?v=VqKF1RSnuvo&feature=g-high-u.

    Also the joint venture by Sony, Hitachi, and Toshiba forming the "Japan Display" are making buzz around the net over their innovative display. http://techon.nikkeibp.co.jp/english/NEWS_EN/20121030/248353/.

    I'll take back my first statement blaming lack of innovation as the problem. Instead I'd say "Japan lack aggressiveness and adventurism in exercising their wisdom, it is the real problem". (Maybe because it is an aging population)This is the correct statement. This is true because Japanese hold so much pride in their companies and they let the Government handle everything. How many zombie companies out their that is supported by the government? They should let those zombie comapanies die! Not only bad for business but bad form of economics. http://business.time.com/2009/05/18/zombie-companies-were-the-problem-in-japan-not-so-much-zombie-banks/

  • 2

    tokorobam

    Japan had such a lead in the hand-phone market for so many years. Great products and innovation. But they squandered it being focused too much the domestic market by NTT and not caring about the international one. And the international smartphone makers are killing the likes of Nintendo as well.

  • 0

    blackrock

    titaniumdioxide

    >

    0 Good Bad

    titaniumdioxideNov. 02, 2012 - 08:37PM JST

    @blackrock

    Yes you are right. Unfortunately Japanese companies are slowpokes in implementing those innovation. Some of those innovation takes more than half a decade just to bring everything into the market. What Japan should do is to become an aggressive player in different markets. Japan's investment to its "Talent Economy" is high and this is noticeable to the number of patents filed throughout the past decade.

    spot on. Japanese clearly have innovations, but the management sucks. They need a new breed of leaders.

  • 0

    Bob Spar

    Will someone explain to me how a company loses 15 billion... just how the hell does that happen, how does a company lose more money than a small country, at a loss of ten million dollars, normal management would be closing and firing staff already... its bullshit people... its the engineered rape of a country, along with the bogus nuclear power problems, designed to destroy Japans middle class... because the bankers cannot pay the damn pensions they owe, and Europe is sucking on the world like a giant vampire...

    Das Bullsheeet Ja....

  • -2

    basroil

    Bob SparNov. 03, 2012 - 04:11AM JST

    Will someone explain to me how a company loses 15 billion...

    Those are paper losses. Part of it is writing off failed ventures (writing off the value of the company, which might be more than they put in), equipment writeoffs, deferring income, etc. When a companies make $140 billion a year, suddenly 15 billion doesn't seem that big.

    And in case you didn't know, which I absolutely know you didn't, these companies employ almost 400000 people full time, and provide billions upon billions in healthcare and pensions each year. The only thing destroying Japan is corrupt politics that reinforces dynastic businesses and politics alike.

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